Waste of the Day: Report Shows Major Cities In Debt
Topline: The 75 largest cities in America were collectively $288 billion in debt at the end of fiscal year 2022, according to think tank Truth in Accounting.
Key facts: The new “Financial State of the Cities” report found 53 major cities that do not have enough money to pay their bills.
Yet all of them claimed their budgets were balanced, as is required by law. That means lawmakers understated each city’s debt by not including future costs like employee pensions and healthcare, according to Truth in Accounting.
The report ranked cities based on their “taxpayer burden”: the amount each taxpayer would need to spend for the government to pay off all its debt tomorrow.
New York City has a taxpayer burden of $61,800, the largest by far despite being the most populous. The city has only six cents saved up for every dollar it will need to spend on retiree healthcare.
Chicago was the second-worst and would need $42,900 from each taxpayer to pay off its debt. That’s partly because the city’s pension liability increased by $1.7 billion in 2022.
Honolulu, Philadelphia and Portland, Oregon round out the five most burdened cities.
Washington, D.C. was the healthiest of 22 cities with a taxpayer surplus. There would still be $10,700 left over for each taxpayer if the city paid all its debt.
Irvine, California and Plano, Texas are the only other two cities on the list with a taxpayer surplus above $5,000.
Background: The 75 cities owned a total of $307.4 billion of assets to pay $595.3 billion in liabilities.
The debt includes $175.9 billion for upcoming employee pensions and $135.2 billion for other retiree benefits.
Still, the numbers pale in comparison to the $34.6 trillion federal debt, and that held by states.
California, New York and Texas, for example, each have more state debt than the 75 cities combined.
Summary: With the constant magnifying glass on federal spending, it can be easy to forget that local governments are still racking up debt at the same time.
The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks
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